Publication on Fondsnieuws about common misconceptions about transaction costs

AF Advisors’ partner Jasper Haak published an article (in Dutch) on Fondsnieuws about misconceptions about transaction costs.

In the article he argues that it is important to know the differences between types of transaction costs, as each type serves a different purpose.

Jasper identifies three different types of transaction costs: investment transaction costs, fund transaction costs and commercial transaction costs. Investment transaction costs refer to costs resulting from transactions in an investment fund, such as rebalancing or cash in- and outflow from participants. These costs are inevitable, but can be controlled by experienced asset managers. The costs caused by cash in- and outflow can be compensated by charging fund transaction costs on a fund-wide level. However, these costs are often fully carried by new entrants, hence they don’t benefit or harm current participants. Lastly, commercial transaction costs are costs incurred for selling and buying a fund. These costs can be managed by the fund distributor.

Read full article on fondsnieuws.nl

text: Jasper Haak